Abstract

In uncertain environments, entrepreneurial experts have a tendency to engage in effectuation, a transformative decision-making response, rather than in prediction-based decision making (Sarasvathy, 2001). Recent research has also found that venture founders differ in their application of both effectual and causal approaches (Mauer, 2009). Yet, little research has investigated why and when entrepreneurs use an effectual decision-making approach rather than a causal decision-making approach. In this paper we extend theory by exploring the relationship between the effectual vs. causal approaches of entrepreneurial decision making and an individual’s internal affective-cognitive structures (Mischel & Shoda, 1998; Izard 1977; 1993). We propose that entrepreneurs differ in their use of decision making reasoning rather than adopt a single effectual vs. causal approach consistently across various situations. Entrepreneurs’ affect, cognition, and venture creating contexts have interactive effects on entrepreneurial decision making and venturing behaviour.

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